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1 PROVING THE ROI FOR INBOUND MARKETING DELIGHT 1 INBOUND

2 PROVING THE ROI FOR INBOUND MARKETING BIGSHOT Inbound is a full-service advertising agency located in Kansas City, Missouri. We can assist you in creating powerful digital marketing campaigns, web development and automated lead generation programs that drive new business and help retain current customers. We can help you build your marketing program from the ground up or step in and assist you with your current marketing programs to make them more effective and results-driven. We can help you attract new customers, sell more products and services, and develop the tools necessary to create a steady flow of new business, all with ROI in mind. 2

3 CONTENTS What is inbound marketing? The culture shift Cost of outbound vs. inbound Inbound marketing best practices: proving the ROI *Much of the data you ll see here was collected from HubSpot s State of Inbound Marketing 2013 report unless otherwise noted. 3

4 YOU HAVE TO SPEND MONEY TO MAKE MONEY IS A FAMILIAR ADAGE MANY BUSINESSES ADHERE TO. While this is still true to a degree, inbound marketing has effectively turned this theory on its head. Whereas the traditional marketing activities that worked in the past required more budget to actually see results, with inbound marketing you can actually spend less money and experience even greater results. 61% According to HubSpot, inbound marketing delivers a cost per lead 61% cheaper than traditional marketing. Talk about ROI! But let s stop right there. Too many times, we re fed handsome statistics and data and expected to go along for the ride. The question businesses want answered isn t does it deliver an ROI? but rather, how does it prove an ROI? That s what we ve aimed to do here: prove the value of inbound marketing by highlighting the most important aspects of a successful campaign, and how they impact your bottom line. We ve collected the newest data from the most trusted industry sources in order to provide you the clearest picture of what to expect from inbound marketing. NO FAIRYTALES. JUST THE FACTS. 4

5 WHAT IS HUBSPOT? HubSpot is the tool that BIGSHOT uses to facilitate all inbound marketing strategies for clients. Rather than using different tools that don t integrate, it makes sense to choose a solution that allows all marketing efforts to work together. This all-inclusive solution allows BIGSHOT to show their clients a clear ROI for their marketing dollars. 5

6 & Partnering with a cutting edge, industry leading company like HubSpot has allowed BIGSHOT Inbound to take our marketing initiatives and business to the next level for our clients. Knowing that the R&D is being done by a trusted partner allows us to focus on what s important getting a marketing ROI for each and every BIGSHOT client. 6

7 THE CULTURE SHIFT Before we can understand the why and how related to the ROI of inbound marketing, we first must understand: WHAT how??? why Why inbound? What does it mean? And more importantly, why does it work? The idea behind inbound marketing is simple as technology changes, so does the way in which people behave and communicate with one another. Our lives are meant to get easier. We re more connected. More informed. We have access to pretty much anything we want wherever and whenever we want it. Everything and everyone is connected and integrated in such a way that it s only natural we ve altered our behavior as it relates to such simple things as watching TV, answering the phone and reading books. 7

8 Technology has drastically changed the way we work and live. Most importantly, it s changed the way in which we come to buying decisions. We ve become reliant on the screen. Smartphones, tablets and laptops have replaced the cash register as the preferred method of buying. It s for this reason that billboards, print ads, direct mail and cold calling simply don t work anymore. Below is a graph published by emarketer on the current revenue generated from e-commerce as well as the projected revenue in the years to come. YEARS SALES (BILLIONS) $ $ $ $ $ $ GROWTH 15.80% 14.80% 14.60% 14.20% 13.60% 12.80% Inbound is right now. It s not coming soon. It s not down the road. It s the manner in which consumers are behaving. Right now. In order to succeed in business moving forward, we all need to go inbound. 8

9 COST OF OUTBOUND VS. INBOUND MARKETING Marketing budgets are being wasted on print ad space, TV commercials and distribution costs. We re much too smart to still be relying on marketing tactics that simply have lost effectiveness. Traditional marketing has been the norm for so long. Print ads. TV and radio commercials. Billboards. Naturally, marketers and business owners still turn to these tried and true methods for results. However, with the dawn of the Internet and mobile generation, it is no longer as effective or cost efficient. 9

10 The average cost for one outbound marketing lead is around $332 compared to the significantly lower $134 cost of an inbound lead. That s more than double the cost. Aside from being more cost efficient, inbound marketing also proved to be more effective in generating leads in 2013 according to the State of Inbound Marketing Report published by HubSpot. Inbound marketing channels are lowest in cost for generating leads Inbound marketing delivers 54% more leads in the 2013 marketing funnel than outbound sources 40% 35% 30% 34% 25% 20% 15% 22% 10% 5% 0% Inbound Outound Survey N =3,339 Q: What percentage of your company s leads come from each of the following sources? *Chart excludes and dont know applicable answers 10 What do these numbers tell us? Well not only is outbound marketing costing you more in dollars spent, but it s also costing you in potential dollars earned not your ideal model for growth and sustainability.

11 The reason is pretty simple. Inbound marketing aligns more effectively with the behaviors of the modern consumer. Mass media is broken. Consumers are too smart for it, and with the advent of modern technologies, are now equipped to skip out and ignore your marketing message very easily. This is why appealing to consumers on their time and in the places they hang out is critically important. As proven in the data below, the best part about inbound is that, because of how social and connected technology has allowed us to be, it s also much easier and effective to carry out an inbound strategy than it would be to continue on your current track using traditional methods. Inbound marketing dominates marketer s top lead sources Social Media, SEO each produce 14% of all marketing leads. 16% 14% 12% 14% 14% 13% 10% 8% 6% 8% 8% 7% 6% 6% 6% 4% 2% 0% Social Media SEO Marketing Trade shows Direct Mail Blogs Telemarketing Traditional Advertising PPC Survey N =3,339 Q: What percentage of your company s leads come from each of the following sources 11

12 INBOUND MARKETING BEST PRACTICES: PROVING THE ROI CONTENT In the past, content marketing meant something you could hold or see on the side of the interstate. But here s the problem: increasingly more people are digesting news on their smartphones rather than the newspaper. They re not even looking at billboards. Print and television ads were your grandparents content marketing. These days, blogging, interacting on social media, and providing useful information are the best ways to engage consumers. 12

13 IT S ABOUT BUILDING RELATIONSHIPS. It s about being the resource your prospects are looking for to assist in their buying process. It s for this reason that blogs and premium content have become an integral part of any successful marketing campaign. Consumers are no longer looking to be interrupted. Interruptive and outbound marketing tactics losing market share Traditional advertising, direct cede more ground in % 25% 20% 25% 25% 15% 10% 5% 0% 17% Survey Segment N= 195 Traditional 17% Direct Mail 16% 18% 13% Telemarketing 19% 19% 14% Trade shows 12% 12% PPC Blogs SEO Q: Which source of leads become less important to your company over the last six months? 9% 6% 6% 6% 5% 3% 4% 3% 3% Social Media 4%

14 Customers will find you if you re providing the resourceful information they re looking for. Companies who recognize this trend are the same ones seeing results. Search engine optimization used to mean stuffing your website with industry-related keywords in the hopes your prospects would find you in their search queries. Then, smartphones and tablets happened. Consumers now had access to information whenever and wherever they wanted. A significant shift happened during this time, as businesses started employing blogs and content strategies in order to cater to this information overload generation. Now, content is everywhere. Google knows this. Which is why keywords don t matter so much anymore as the quality and consistency of the content you re distributing. 14

16 SOCIAL MEDIA When it comes to cost per lead and acquisition, nothing provides value quite like social media marketing. There s simply no other place where marketers and business owners have such limitless access to members of their target audience for free! Word-of-mouth marketing has always been the most powerful form of advertising. And with the addition of social media as a marketing initiative, businesses have the ability to put that word-of-mouth marketing on steroids, as one happy customer could mean 100 more. When it comes to the value of Facebook fans, 85% of fans of brands on Facebook recommend brands to others, compared to 60% of average users, according to a study by Syncapse. The beauty of it all is that while extremely effective at targeting your ideal customers, it s also one of the cheapest methods for doing so. 16

17 30% Social media, deliver lower average costs per lead 27% of marketers report below average costs per lead for both and social media 25% 20% 15% 10% 5% 27% 27% 25% 24% 16% 15% 12% 12% 12% 0% Social Media Marketing SEO Blogs PPC Direct Mail Traditional Advertising Telemarketing Trade Shows Survey N =3,339 Q: Please estimate your company s cost per lead for each of these channels versus your overall average cost per lead. *Chart shows just below-average cost per lead Leads are great. A lower cost per lead is even better. However, none of this really matters unless it translates into business, right? The question so many business owners want to know is, is social media actually going to result in customer acquisition? 17

18 67% One HubSpot study calculated the percentage of companies with a social media presence and found that 67% of B2C companies with a Facebook business page have acquired a customer through their Facebook page. Customer acquisition by channel B2B vs B2C 80% 60% 40% 20% 0% 61% 39% 55% 63% 41% 67% 39% 53% Linkedin Company Blog Facebook Twitter % of Channel users who acquired a customer through that channel B2B B2C This Facebook figure was the highest customer conversion percentage, followed by a 53% conversion from Twitter and a 39% conversion from LinkedIn. LinkedIn was the most successful site for obtaining B2B customers at 61%. Clearly a strong social media presence is an easy way to grow your customer base. 18

19 How about when compared to other common marketing methods used to generate customers? 16% 14% Social media plays a key role in customer acquisition 15% of marketers say SEO delivers above-average sales conversions; 13% say the same for social media 15% 12% 13% 12% 11% 10% 8% 6% 9% 8% 7% 7% 4% 2% 0% SEO Social Media Marketing Trade Shows PPC Telemarketing Direct Mail Blogs Survey N =3,339 Q: What is the average percentage of leads your company converts to sales? *Chart shows just above-average lead conversion rates Social media marketing is not a luxury for businesses who simply have the time for it. It s a necessity for any business or marketer that s functioning in the 21st Century Connection Economy. That means you. IT S NO LONGER A MATTER OF DOES IT PROVE ROI? IT DOES. IT S ABOUT DEVELOPING A STRATEGY THAT WORKS FOR YOUR COMPANY. 19

20 Businesses still using direct mail as a method of customer acquisition are basically paying to end up in someone s trash bin. According to HubSpot, 44% of direct mail is never even opened. And while it s still effective in some industries, distribution costs render the ROI minimal, particularly when compared to marketing. Below is a chart detailing the total spent on the various channels in COUNT DIRECT MAIL SPEND SPEND TOTAL SPEND Direct Mail and 35,000 $ 21,000 $ 210 $ 21,210 Direct Mail Only 35,000 $ 21,000 $ - $ 21,000 Only 35,000 $ - $ 210 $

21 Due to the expense of Direct Mail, is the clear winner in terms of return on investment. TOTAL REVENUE TOTALSPEND ROI Direct Mail and $ 627,463 $ 21, Direct Mail Only $ 576,408 $ 21, Only $ 545,951 $ 210 2,600 marketing is the clear winner in terms of ROI. Utilizing marketing over direct mail allows you to reallocate resources to other marketing initiatives in order to strengthen your overall campaign. However, before you go hiring someone whose sole purpose is to hit the send button all day, know that marketing is much different under the umbrella of inbound marketing than what you re probably used to. It s all about proving context. Think about how many s you receive (and ignore) from brands throughout any given work week. The reason for this is that marketers have ruined it for everyone. Which is why we needed a new approach. We needed to be more human. Inbound marketing utilizes list segmentation tools in order to deliver a more targeted message to each recipient, ensuring increased engagement, as well as a greater likelihood to buy. 21

22 As you can see from the graph below, sending segmented s significantly improves just about every metric as it relates to the success of your marketing campaigns. list segmentation results 0% 10% 20% 30% 40% Increased Open Rates Greater Revelance Lower Opt-Out/Unsubs Rates Better Deliverability Increased Sales Leads Greater Revenue Greater Customer Retention Greater No. of Transactions Greater customer acquisition Lower Spam Complaints Improved Word-of-Mouth Other 4% 28% 24% 24% 24% 21% 18% 15% 15% 14% 39% 34% % of Respondents In addition, HubSpot concluded that targeted and segmented lead nurturing s generate an 8% click-through rate compared to general sends, which generate just a 3% click-through rate. Moral of the story? marketing delivers an ROI far greater than any print collateral you plan on distributing. More importantly, it has the potential to be far more personal and targeted, which in turn, ensures optimal results. 22

23 CONCLUSION Inbound marketing often has an idealistic tonality in its approach and presentation. However, let s not get confused. Inbound marketing hasn t grown to be as expansive as it is because it sounds good or seems like the right thing to do. No. It s grown to become the movement it has because of one reason alone. IT WORKS. No empty promises or fluff. And it can work for you. INBOUND Contact BIGSHOT Inbound today to learn how our inbound marketing services can help your company meet its goals. BIGSHOTinbound.com

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